Bad faith could mean a couple of things, but in the case of Insurance, Bad Faith is the situation where an Insurance firm fails to honor the terms of contract with the policyholders. It’s also bad faith if the Insurance Company violates or doesn’t meet the standards stipulated by the Florida Law and we at Your Insurance Attorney are here to help you in such cases. All Insurance companies in the United States are under the United States law which states that they owe a duty of good faith dealing fairly to the person they insure.
Each state has its specific laws regulating the insurance industry since the United States doesn’t have the authority to regulate commerce. Regulation of the Insurance Industry at the state level can be done in two ways. First, the State can come up with an Insurance code or a set of rules that govern all aspects of the insurance industry. These aspects include financing, operating and winding down insurance companies.
An Insurance company needs to have a huge amount of capital so that they will be able to pay up the claims brought forward. Secondly, a state can regulate the insurance industry through the judges interpretation of the insurance codes stated above. A policyholder can present a claim, and the judge decides after listening to both sides and comparing these claims to the aforementioned Insurance code.
Bad Faith can either be First party or Third Party. An example of the First party is where an Insurance company insures property such as a car or a house from damage. If damage occurs, it’s the job of the insurance company to investigate, determine the value of the damage and pay the appropriate value. It is bad faith when the insurance company fails to investigate well or pays a low value compared to the actual value of the policy. An example of the Third party Bad faith is a situation where the Insurance Company wrongfully fails to defend the policyholder from the underlying action by a third party or in a lawsuit. Florida has stipulated its laws when it comes to bad faith.
According to Florida’s laws, insurance companies are supposed to work in support of the policyholders and not against them. Some insurance companies tend to look for reasons not to compensate when a claim is brought to them. In addition to paying the appropriate value, Insurance companies are tasked with giving all the necessary support to the policyholder. This includes paying the compensation on time, cooperation during the dealings and offering valid reasons for denying coverage, citing the principles behind their reasons. When this insurance policy is violated, the policyholder is allowed to file both a tort claim and a contract claim. You should file a Tort claim because any loss or damage arising from the breach of contract is not covered in the contract claim. If the loss and damage from this contract violation are grievous, the policyholder could be paid an amount larger than the original value of the policy.
We understand how insurance companies operate, and that is the reason we aggressively pursue all insurance-related cases. The experienced Miami, Dade County bad faith attorneys at Your Insurance Attorney will protect your rights. Contact us to request a free consultation regarding your claim.